In December 1991, General Cigar again considered using an element of
the Cuban COHIBA trade dress, the so-called "Indian Head" design. Outside
counsel advised against it, and in-house counsel informed the marketing
department that "We are out of luck on the use of the Indian Head
design." The outside counsel in April 1989 and December 1991, advised
General Cigar that either non-use or mere token use of a mark was
insufficient to sustain rights and would constitute abandonment.
D. 1992-1997: The COHIBA-Branded "Temple Hall" Cigar
On September 1, 1992, the premiere issue of Cigar Aficionado was
published, with a distribution of 115,000 copies*fn13 and display at 453
cigar outlets. The premier issue was introduced to the trade on August
27, 1992, at a breakfast held by Cigar Aficionado at the annual
convention of the Retailer Tobacco Dealers of America ("RTDA"), the
principal retailers' association. Complimentary copies of the premier
issue were distributed to the 300 to 400 attendees.
The issue featured the Cuban COHIBA in a six-page cover story about
"Cuba's Best Cigar," entitled "The legend of Cohiba: Cigar Lovers
Everywhere Dream of Cuba's Finest Cigar."*fn14 On September 21, 1992,
Newsweek ran an article on Cigar Aficionado's launch, noting that COHIBA
was the initial winner of the magazine's first "blind tastings" feature,
and that the first issue had featured ads for premium products such as
Glenlivet single-malt scotch, Louis Vuitton luggage "and, of course,
COHIBA cigars."*fn15 Cubatabaco claims that General Cigar decided in the
fall of 1992 to sell a new product under the COHIBA name "to somehow
capitalize on the success of the Cuban brand and especially at this point
in time the good ratings that it got, the notoriety that it got from
Cigar Aficionado." General Cigar states that it had always intended to
resume use of the COHIBA mark.
In September 1992, defendants began to work with an outside graphic
designer, Cliff Bachner ("Bachner") on the trade dress of the new
COHIBA. John Rano, General Cigar's head of marketing, instructed Bachner
to make "exactly same" copies of the Cuban COHIBA trade dress. Bachner
did as instructed, but General Cigar states that it never used those
prototypes in commerce.*fn16 Milstein, who was Assistant General Counsel
for General Cigar at that time, testified in deposition that General
Cigar wanted to use a label as near as possible to the Cuban COHIBA "for
the same reason they wanted to use it in `89 and again in `91," that is
"they wanted to somehow capitalize on the success of the Cuban brand, and
especially at this point in time the good ratings that it got, the
notoriety that it got from Cigar Aficionado." Milstein Dep. at 284.
In the first week of November 1992, Ron Milstein, General Cigar's then
Assistant General Counsel ("Milstein"), and Alfons Mayer, General Cigar's
Vice President for Tobacco ("Mayer"), traveled to Havana, Cuba, at the
invitation of Cubatabaco to attend an international conference in Havana
for the 500th anniversary of the European discovery of tobacco, which
included the launch of a new line of COHIBA cigars, "Siglo (Century)
1492." In a private meeting, Mayer informed Padron of General Cigar's
interest in entering into a broad and exclusive partnership with
Cubatabaco for the United States territory upon the embargo's end, which
would replicate the 51/49 partnership for distribution of Cuban cigars
that Cubatabaco had created in the rest of the world. COHIBA was not
mentioned during the meeting. Milstein wrote of the meeting:
We met with Mr. Padron for 1 hour over breakfast. The
talk was of the Consolidated sale rumor. We got no
more information. Mr. Padron made it very clear that
trademarks are not important. He said Havana will sell
cigars no matter what name they have. Any companies
that have marks (this was directed to G.C.) would have
to sell (give) the marks back to Cubatabaco and get
distributorship rights only, or else Cubatabaco will
sell the cigars under a new name.
While at the conference, Milstein was introduced to Adargelio Garrido,
a Cubatabaco attorney ("Garrido"). Milstein did not speak Spanish and
Garrido, a native Spanish speaker, had not studied English at the time.
General Cigar claims that a conversation took place between the two men.
The evidence of this meeting is a memorandum Milstein wrote two weeks
after the meeting.*fn17 Milstein wrote that Garrido "acknowledged that
we owned the name in the U.S. and that we would be free to sell a cigar
under that name there." Milstein's memorandum also indicated that Garrido
stated that Cubatabaco would object to any use General Cigar made of the
trade dress associated with Cubatabaco's COHIBA cigars. Cubatabaco raises
several objections to this evidence.*fn18
In November 1992, General Cigar began to sell a COHIBA cigar again by
relabeling its pre-existing "Temple Hall" cigar. This COHIBA was a
medium-priced cigar. General Cigar made no reference to its earlier
"COHIBA" product, and the trade dress was completely different. The
cigars were sold only at Alfred Dunhill of London, an upscale retailer
("Dunhill"), and Mike's Cigars, a Florida retailer, wholesaler, and
mail-order distributor. In 1992, General Cigar sold through Dunhill
only. General Cigar engaged in no advertising or promotion of the
COHIBA-branded Temple Hall cigar from 1992 to 1997.
Prior to this time, General Cigar knew of the Cuban COHIBA's sale,
use, registration and employment in Cuba.
In the fall of 1992, General Cigar requested that its outside counsel
legal opinion regarding its rights to the COHIBA name and use of
the Cuban COHIBA trade dress. On December 2, 1992, Morgan & Finnegan
advised General Cigar that Cubatabaco's registrations of the trade dress
would probably not support an action by Cubatabaco against General Cigar
for use of its trade dress. Instead, it warned that use of the Cubatabaco
trade dress could increase the potential for Cubatabaco's being able to
show likelihood of confusion regarding the COHIBA mark based upon its
"prior existing reputation for the Cuban COHIBA mark." Further, use of the
trade dress "would lend support to an argument that General Cigar was
acting in bad faith, i.e. with an intention to mislead the public into
confusing General Cigar's product with Cubatabaco's" and could expose
General Cigar to liability. Morgan & Finnegan advised General Cigar to
obtain Cubatabaco's written confirmation of General Cigar's right to use
the COHIBA word mark and that it would be prudent not to launch the
product even without the trade dress elements of Cubatabaco's product
before obtaining that confirmation. It also advised General Cigar to file
a new U.S. trademark application coinciding with the new launch of the
COHIBA product. This new registration "would not be vulnerable to any
claims of earlier abandonment*fn19 which may be asserted against the
On December 30, 1992, General Cigar filed an application to register
COHIBA, purportedly to protect the appearance of the mark in bold,
capital letters. Cubatabaco claims that General Cigar filed the
application because it had abandoned its 1981 registration.
In a January 13, 1993 memo to the top executives of General Cigar, the
assistant general counsel Milstein laid out General Cigar's strategy "to
exploit the popularity, familiarity, brand recognition and overall
success of the Cuban Cohiba." Milstein also stated General Cigar's desire
to use "the familiar trade dress of the Cuban Cohiba."
In the spring of 1993, General Cigar's advertising agency developed a
campaign for the new, premium COHIBA. They first phase of the "strategy"
was to "[e]xploit the Cohiba name, with its reputation as one of the
world's finest cigars amongst cigar smokers, to build a brand image for
the U.S. Product."*fn20 In mid-1993, General Cigar instructed the
advertising agency to stop working on the COHIBA campaign, and no more
work was done until March 1997.
Also in the spring of 1993, General Cigar's graphic designer developed
trade dress designs similar, but not identical, to the Cuban trade
dress, based on instructions for "further exploration," "in terms of
color, typography and graphics," of the "original [Fall 1992] comps"
which "came from the Cuban Cohiba." These plans, too, were put on hold
from mid-1993 until March 1997. During the time period from mid-1993 to
March 1997, General Cigar claims that it was in the process of developing
the blend to use in the "super-premium" COHIBA. Cubatabaco contests
this, stating that General Cigar's practice was to develop blends and
then name them.*fn21
In a December 1993 interview with Padron, which appeared in the Spring
1994 edition of Cigar Aficionado, the following exchange purportedly took
CA: If the embargo ended tomorrow or two to five years
from now, have you thought through how it would
happen and what the scenario would be? You have
problems with certain brands as far as trademark
issues, and with other brands you do not have a
problem. Have you thought how you would introduce
your brands to the American market?
Pedron: First there is going to be a fight. We have
not been able to have the brand name in the
United States because of the embargo. It was
forced by [the United States]. It was not
decided on our side. . . . But we are not going
to fight in order to get our cigars into the
United States. As we always say, a Habano
[cigar] is a Habano [cigar]. With a name of
Marvin or Padron or Meyer or whatever goes on
the cigar, it is a Habano. So, we are going
to let everybody know that we are here, and
this is a Habano. We are not going to fight
with somebody else because he owns the brand
name of Cohiba or Montecristo in America. We
have been living without that for a long time.
Cubatabaco objects to this statement for the same reasons it objects to
Padron's earlier interview excerpts.
In January 1994, Cubatabaco received a box of General Cigar's
COHIBA-branded Temple Hall cigars. Along with the box, Cubatabaco
received a note stating that the box was not sold as a "regular item" and
that it was being produced by General Cigar only for purposes of its
trademark registration.*fn22 At the time Cubatabaco believed that
General Cigar was not making stable or continuous use of the COHIBA
trademark in the United States. Cubatabaco's counsel did not learn of the
box until some time later.
On April 12, 1994, General Cigar's application to register COHIBA in a
block letter format was published for opposition. No entity challenged
General Cigar's application to register COHIBA in block letter format at
On June 2, 1994, Cubatabaco first learned of General Cigar's
application to register COHIBA in block-letter format after the time to
file an opposition had expired. Sometime after that, Cubatabaco engaged
and communicated with its United States attorneys (plaintiff's counsel
Rabinowitz, Boudin, Standard, Krinsky & Lieberman ("Rabinowitz, Boudin"))
with respect to contesting General Cigar's rights to the COHIBA mark.*fn23
The Autumn 1994 issue of Cigar Aficionado quoted Cullman as stating
that General Cigar (1) was "sitting on" its COHIBA rights with "no big
plans at the moment," despite, in the interviewer's words, the fact that
COHIBA "is widely regarded as the No. 1 brand produced in Cuba"; and (2)
would "like to work something out with" Cuba regarding COHIBA when the
embargo was lifted.
In 1995, the PTO granted General Cigar's application to register the
In the September 1996 issue of Cigar Aficionado, Cullman announced that
General Cigar "had a plan to come out with Cohiba" "within the next two
Cubatabaco had decided in the summer of 1996 to commence proceedings
against General Cigar and on November 19, 1996, Garrido instructed
Rabinowitz, Boudin to do so.
General Cigar sold the following amounts of the COHIBA-branded Temple
Hall cigars, constituting less than 0.05% of General Cigar's annual
premium cigar sales, from 1992 to 1996:
1992: 5,600 (November and December only)
V. Cubatabaco Submits Cancellation Petition
On January 15, 1997, Cubatabaco applied to register the COHIBA mark and
filed a Petition for Cancellation with the PTO. On May 28, 1997, Cullman
contacted Francisco Linares, president of Habanos, S.A., a marketing arm
of Cubatabaco, to propose a settlement meeting. As noted earlier, the
instant lawsuit was filed on November 12, 1998.
General Cigar claims that it has been prejudiced because Cubatabaco
waited until 1997 to file this petition.
First, it claims it had taken a number of actions to protect its rights
in the COHIBA mark. Cubatabaco alleges that the bulk occurred after
Cubatabaco filed its cancellation petition in January 1997. General
• filed two lawsuits for infringement of General
Cigar's COHIBA trademark, both of which resulted
favorably for General Cigar. General Cigar Co. v.
G.D.M. Inc., 97 Civ. 7783, 988 F. Supp. 647 (S.D.
N.Y. 1997); Case No. 98 Civ. 8174 (S.D.N.Y.).*fn24
• assisted the Customs service to prevent importation
of counterfeit COHIBAs;*fn25 communicated with
importers of detained or seized goods.
• participated in one action before the PTO to
prevent the registration of a mark, "CAOBA,"
similar to its COHIBA registration.*fn26
• obtained or supported actions by criminal law
enforcement authorities against sellers of
unauthorized COHIBA cigars and related products.
• hired private investigators to investigate
infringers and their activities, to submit related
affidavits in support of search and seizure
warrants and to review seized merchandise and
related records bearing the COHIBA mark, all at
General Cigar's expense.
• sent at least two*fn27 "cease and desist"
letters to infringing users of the COHIBA
• spent $1.5 million in enforcement activities.